Indian Smart Card Market - Dec'13

  • 684 views
Uploaded on

 

More in: Business , Technology
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
684
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
35
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Indian Smart Card Market All rights reserved. This publication is protected by copyright. No part of it may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic mechanical, photocopying, recording or otherwise without the prior written permission of the publisher. Indian Smart Card Market
  • 2. Market Overview Figure-1: Global- Smart Card Shipments (Billion Units), 2009- 2013 8.60 5.20 2 0 09 2 0 10e 5.46 6.80 6.20 2 0 11e 2 0 12e 2 0 13e Source: BCC Research, Euromonitor The market for smart cards is experiencing significant growth with the recognition that the technology provides a platform to package products and services that meet the needs of individual customers. The Global Smart Card Market had 6.2 Billion smart cards shipped in 2011 reaching US$ 4.7 Billion and in 2012, the number of smart card units shipped estimated to reach around 6.8 Billion Units and in value terms it is estimated to be US$ 5.1 Billion. Public Distribution System, Pay TV, Loyalty Cards, Financial Services, Travel Identity, Automated fare collection, Healthcare etc. Figure-2: Global Smart Device Shipment- By Sector (Million Units), 2011 75% 17% Telecom Further, the telecommunication segment lead with around US$ 4.7 Billion in 2011, expected to rise to about US$ 5.1 Billion in 2012 further to jump to US$ 7.3 Billion by 2017 thus growing at a CAGR of 7.4% globally. As of now, smart cards are used for a wide range of applications in India across government, telecommuniction, Natinal Population Register, Banking Retail Governmant ID Healthcare 4% Others 4% Source: Eurosmart Note: Data is estimated Indian Smart Card Market
  • 3. Figure-3: Global Smart Card Sales - Telecom (Million Units), 2008-2011 4500 4000 Worldwide EMV and Dynamic Data Authentication(DDA) migration benefit is been witnessed from strong growth in Latin America and Asia. Also, Strong dual contact and contactless cards growth are expected in the coming years. 3400 There would be an expected deployment of migration to new, more secure documentation with an increased emphasis on integrating ID and healthcare solutions with contact and contactless smart technology. 3200 2 0 08 2 0 09 2 0 10e 10 10 Figure-5: Global Smart Card Sales - Government & healthcare Million Units), 2008-2011 2 0 11e 75 0 88 0 Source: Eurosmart Figure-4: Global Smart Card Sales - Banking & Retail Sector (Million Units), 2008-2011 1010 650 750 880 65 0 The explosive growth in the cell phone market in India and China, has resulted in tremendous growth in the smart card market. Further, the widened 3G and 4G penetration has also enhanced the demand for these cards. 2 0 08 2 0 09 2 0 10e 2 0 11e Source: Eurosmart The Indian smart card market shipped 38.96 Million Units of smart cards in CY Q1, 2013. The Market accounted for INR 31.03 Billion in 2011 and is estimated to be around INR 37.24 Billion in 2012. 2 0 08 2 0 09 2 0 10e 2 0 11e Source: Eurosmart Indian Smart Card Market
  • 4. Some of the globally recognised card manufacturers who dominate the Indian market are Schlumberger, Gemalto, G&D, Obethur, VCT and Orga. Among the major systems integrators are Shonkh, Figure-2: India- Smart Card Shipments (Million Units), 2009- 2013 1354 561 2 0 09 2 0 10e 812 2 0 11e 1000 1180 2 0 12e 2 0 13e Source:RNCOS Thus, the smart card market was anticipated to grow at CAGR of around 24% during the period of 2009- 2013. Over the years the Telecommunication applications has ruled the India smart cards market, wherein these cards are used majorly as SIM cards in mobile phones. The telecom sector, represented the biggest application sector in 2012, accounting for more than 70% of the total market volumes. Rolta, Smartchip, CMS, Siemens (SISI), CA Satyam and E-Cube.Further, the suppliers within the industry are essentially semiconductor manufacturers like Infineon, STMicroelectronics, Atmel, Philips, Siemens Semiconductor, etc. Indian Smart Card Market
  • 5. Market Size and Growth Figure-7: Global – Smart Card Market (Billion Units), 2012 & 2017 11.1 New and attractive growth prospects are being witnessed due to EMV ( Euro Pay, Master Card and VISA) migration, Long Term Evolution(LTE) deployment and government support. Moreover the entry of innovative smart card devices in the market will further strengten the overall industry in the long run. 6.8 CAGR 10% 2012e Further, the National Population Register, which is expected to represent the biggest application segment in 2018, is expected to account for less than 31% of the total market volumes by 2018. 2017f Source: BCC Research Globally, the smart card market stood at 6.8 Billion Units in 2012 and is expected to reach 11.1 Billion in 2017 and thus is anticipated to grow at a CAGR of around 10% during the period of 2012- 2017. Figure-8: India – Smart Card Market (Billion INR), 2012 & 2015 52.76 37 The Indian Smart Card Market is expected to reach around INR 52.76 Billion by the end of 2015, an increase of about INR 21.73 Billion from the revenues in 2011.Thus, the Smart Card Market is anticipated to grow at a CAGR of around 12.31% during the period of 2012- 2015. During the coming years, smart cards are expected to percolate more into a number of other sectors such as credit/debit cards, financial inclusion, public distribution, healthcare, identity management, transportation, etc. CAGR 12.31% 2012e 2015f Source: Cybermedia Research Indian Smart Card Market
  • 6. Market by Category Figure-7: Global – Smart Card Market (Billion Units), 2012 & 2017 The dominance of contact smart card is primarily on account of telecommunication, broadcasting and banking vertical. Telecommunication sector has shipped more than 75% of the Total Unit Shipments of Contact Smart Cards for the India Smart Card Market in CY Q2 2013. 95% 5% Contact Contactless Hybird Hybrid cards lead the smard card category after the contact smart card market with around 5% share in the market. And the trend of increasing demand of contactless smart card is mainly being fuelled by Near Field Communication(NFC), mass transit projects and e-passports. 1% Source: 6wresearch The cards in use essentially fall under three categories – contact, contactless and hybrid smart cards. Traditionally, contact smart cards have played a crucial role in defining the growth of the market. But in the coming years, a major shift is expected towards contactless and hybrid smart cards. The India Smart Card market is lead by the Contact Smart Cards, which has also captured more than 90% of the total market share for the CY Q2 2013.Hybrid Smart Cards hold around 5% market share of the Total Units Shipped. Further,on the application front, financial service sector is the key user of contactless smart cards and e-passports and other identification applications holds the prominent position in the government sector. Further, it is also expected that microprocessor based smart cards will continue to dominate the smart card shipments, as compared to the memory chip based smart cards. The microprocessor segment has accounted for shipments of 4.5 Billion smart cards in 2009, which was 86.5% of the overall shipments (5.2 Billion) of smart cards. Indian Smart Card Market
  • 7. Future Outlook The changing global scenario is expected to turn out to be one of the key drivers behind the rising demand for smart cards. The Telecom Market in India is already booming with the 3G spectrum building up, there will be yet more expansion with the enhanced adoption of 4G network. Further, the penetration of mobile phones in rural areas in turn increasing the demand for SIM cards would also result in growth in the telecom sector. Banking is another sector where the demand for smart cards is rising as smartcards are slowly changing over from being made of magnetic strip cards. Thus, this vertical is also expected to witness a growth in smart card adoption in the years to come. Further, ID verification is another field that will experience a growth in the demand for smart cards. With the aim to secure and safeguard identities against theft, this vertical will receive special attention. For instance, the Delhi Metro Railway Corporation (DMRC) has been using the technology extensively. The demand rose from 0.45 Million to 1.32 Million from the first year of implementing the technology, growing to 2.1 Million. There has been almost a fivefold increase in demand within a span of just three years. As per the government’s guidelines, all states and union territories will have to compulsorily start issuing smart cards for all driving licenses (DL) and registration certificates (RC). Thus, Upgrading DL and RC books from paper to smart cards is going to result in high volumes. Also, in the current manufacturing scenario, 50% of the smart cards are still being imported. But with the number of players setting up new facilities in India, more than 70-80% of manufacturing is expected to be done locally in future. Indian Smart Card Market
  • 8. Opportunities & Challenges Opportunities • E- Governance Initiatives to Create Huge demand in Public Sector E- Governance projects such as National Population Register Project, Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), Rashtriya Swasthya Bima Yojna, Ex Serviceman Healthcare Service (ECHS), Driver License, Ration Cards, Passports, PAN cards etc. are expected to be deployed on a large scale by the Government. Thus, would create a huge demand in the Smart Card Market. • Modernization of Public transport systems in expanding smart card usage For instance, Kerala State ‘City on Wheels’ implemented jointly by Technovia Info Solutions and Kerala Bus Transport Association( KBTA) is a project through which passengers can pay their tickets by swaping a smart card. • Demand for plastic money Spending through debit or ATM cards has increased by 45% year-on-year during 201112. Further, the shift towards the VISA international Cards from the debit cards in the banking and finance sector is also supporting the smart card market in India. Indian Smart Card Market
  • 9. Challenges • Implementing Smart Card System requires Substantial Infrastructure Investments. For instance, Only 50% of the current ATMs are with nominal s/w and h/w upgrades which can accept EMV chip cards, remaininmg h/w require significant upgrade, for example, back-end systems and point-of-sale terminals or even replacement.Thus implementation of EMV based bank cards are further low. • Declining prices of the smart cards Firstly, costs of smart cards are declining as production volumes rise. Further, prices are also affected due to the considerable drop in the prices of chips used in it. • Bureaucratic Delays For instance, a number of government projects such as the UID, E-passports, EPFO, etc have been delayed or cancelled due to problems like lack of funds, technical issues, legal wrangling, etc. • Lack of standards to ensure interoperability among varying smart card programs Mobile service providers, transport operators and banking systems etc need to converge their efforts regardless of their different business objectives i.e market must be stable and based on proven and trusted standards. • Limited Awareness and resistance to technological changes. Indian Smart Card Market
  • 10. R ecent News June 08, 2012, The Kolkata Metro announced to install automatic smart card recharging machines across all its 23 station after the success of the automatic smart card recharging machine at the Park street Metro station. August 05, 2013, Maharashtra state government has decided to start the smart card system for automated toll collection at all major booths in the state. Also, planning to introduce prepaid RFID-based cards that can be fixed on windshield of vehicles. This will ensure vehicles drive through a dedicated lane at toll booths without stopping. September 02, 2012, Passengers will soon be able to use smart cards for buying train tickets on the busy Delhi-Howrah and Delhi-Mumbai routes. The smart card, called Go-India card, can be used for booking tickets for long distance and sub-urban trains on Delhi-Mumbai and Delhi-Horwah routes. October 13, 2012, Oil marketing companies are planning to introduce smart cards for cooking gas customers in a move to keep tabs on consumption. Following the decision of the Petroleum Ministry to cap the number of subsidised gas cylinders to six per household a year, oil marketing companies BPCL, HPCL and IOC are thus evaluating the prospects of introducing the smart cards. Indian Smart Card Market
  • 11. Looking for an in-depth study Our Proposition RNCOS is a leading Business Consultancy firm helping its clients to enter new geographies and in attaining growth by developing market strategies for them. GROWTH PARTNER We help you make informed decisions through the practical application of research, hand holding you to your success… Critical questions that businesses need to address: • • • • Where should you set up your business? Who should be your distributors? What is the current market structure & size? Who should be your customers? We understand your immediate needs and your long-term goals and objective and work with you on how to accomplish them. RNCOS blends the best of strategy consulting with the best of market research to provide organizations with accurate, succinct answers to their most important business questions. Our offerings Product Segments Market Insights • • • What is the market size Structure of the market Who are buyers • • Identification Competitive Assessment • Most suitable distributors and channels for your business. • Analyzing their strength, credibility. Similar products in the market Features, attributes & market share of these products • Customer preferences • Price range of these products • Financial & strategic analysis of existing competition • Acceptance level among customers Indian Smart Card Market
  • 12. For more information on how we can work with you, contact MARKETING TEAM RNCOS E mail: marketing@rncos.com Website: www.rncos.com Phone: +91 120 4224700 /01 / 02/ 03